June 7th, 2011 9:28 AM by Eileen Denhard
No one wants to sell their home in a short sale but a little preparation can make the process easier. Realtor® Debra Mitchell of Palmdale, California lists five helpful tips for making your short sale go more smoothly:
1. Hire a short sale specialist. Not all Realtors are experienced in short sales. Depending on what kind of short sale you are requesting (the Federal government has a program called, “HAFA,” which among other things gives the homeowner $3000 in relocation assistance) or a regular short sale, your Realtor MUST be well versed in the qualifications and guidelines that your bank requires for a short sale approval. Hiring a Realtor that is well informed about the changes in the various short sale programs will be the difference between an approval or a denial.
2. Have all your ducks in a row at the listing appointment. The top reason that many short sales are denied is incomplete documentation from the homeowner. A short sale specialist will give you a list of documents you will need prior to your listing appointment. Make sure you provide your Realtor with all of the requested documentation at the listing appointment. Banks will not review your short sale request for approval unless all documents are received and scanned into their systems. Many banks loose documents during the process and that too has led to denials. If you submit a complete package upon first submission you better your chances for a timely review of your file and a subsequent approval.
3. Give all details about liens on property. Make sure you tell your Realtor if there is a line of credit or a second or third lien on your property. Your Realtor is going to have to negotiate with EVERY lien holder on the property in order to convey clear title (a title free of any liens or encumbrances) to a prospective buyer. You will not have a successful short sale unless all previous liens are released!
4. Provide additional documentation in a timely manner. Many times during the short sale process the bank will require additional documentation (such as updated pay stubs and bank statements). Because the short sale process can take up to 90 days these documents will need to be updated every 30 days. Make sure to provide your Realtor with updated documentation in a timely manner. It will help to move the process along faster and help you move on with your life!
5. Don’t move during the short sale process! Many lenders require that the homeowner occupy the property as their primary residence until the short sale is completed. DO NOT MOVE until the sale of your property is completed.